LV operation part of Merck spinoff

Tuesday, Jan. 29, 2002 | 9:51 a.m.

SUN STAFF AND WIRE REPORTS

WHITEHOUSE STATION, N.J. -- Merck & Co., the second-largest U.S. drugmaker, plans to sell part of its Merck-Medco pharmacy business to the public in the first half to focus on pharmaceutical operations.

Merck paid $6 billion in 1993 for the pharmacy-benefit business, which acts as a middleman between drugmakers and health-care plans. Medco's reported 2001 annual sales climbed to $26 billion, more than half of Merck's sales for the year, from $2.2 billion in 1992.

Merck-Medco employs more than 2,200 people at two locations in the Las Vegas/ Henderson area -- 400 N. Stephanie St. and 6225 Annie Oakley Dr. The company employs about 950 people in local call center operations and 1,300 in pharmacy operations. No layoffs are expected because of today's deal.

"We expect our current employees to continue with the new company," said Merck-Medco spokeswoman Gwen Fisher. "We believe the management team and employee base is experienced, strong and integral to the company's success, so we don't anticipate any reduction in staff."

Medco has a lower profit margin than Merck's pharmaceutical business and selling a stake in the unit may help Merck fund acquisitions to gain new products as it loses patent protection on older medicines.